Rite Aid (RAD -15.38%) is ready to see if a reverse split can prop it back into exchange-listing compliance. The struggling drugstore chain's board has approved a 1-for-20 exchange that will go into effect at the market open on April 22. Every 20 shares of Rite Aid will be swapped out for a single new share at 20 times the price.

Life's been rough for Rite Aid since it's seen not one but two potential buyouts go bust in the past two years. Shareholders thought they were doing the right thing when they pulled support for a combination with grocery store giant Albertsons last summer, but the stock has gone on to shed another two-thirds of its value since that deal came undone. 

Reverse splits are zero-sum games in theory, but in reality, investors will find most companies going that route continuing to decline in value. A reverse split doesn't "reverse" the negative momentum of a stock, and it certainly doesn't repair the damaged fundamentals that sent the shares lower in the first place. 

A Rite Aid pharmacist in a Pharmacy Champions ad.

Image source: Rite Aid.

Three stocks that bounced back

The odds are not kind for companies shifting into reverse, but it isn't always a death sentence. Let's go over some of the stocks that have survived the process, only to trade higher today.

  • Booking Holdings (BKNG -2.92%) is the undisputed star of the Reverse Split Club. The online travel portal -- back when it was Priceline.com -- executed a 1-for-6 reverse split in the sudsy aftermath of the dot-com bubble in 2003. It has been able to clean up nicely as travelers worldwide rely on Booking's various platforms. The stock has become a 71-bagger since its split nearly 16 years ago. 
  • Laboratory Corporation of America (LH -0.37%) is another rare turnaround. It declared a 1-for-10 reverse split in the springtime of 2000. The provider of clinical lab tests and testing services has since been the picture of health for investors. LabCorp stock is now a 10-bagger since its split.
  • Citigroup (C -1.70%) hasn't delivered life-altering wealth like Booking and LabCorp, but the banking giant is trading higher than when it opted for a 1-for-10 split in the springtime of 2011. Citi stock has risen a dividend-adjusted 54% since the split, sorely losing out to the market but still a positive gain on an absolute basis. 

Rite Aid will have some big shoes to fill if it wants to walk in the footsteps of Booking, LabCorp, and Citigroup. Most reverse splits end up breaking hearts, but hope always springs eternal.